After an Air America Radio buyout plan by eccentric Democrat Party fundraiser / Huffington Post blogger Sheldon Drobny came so close to fruition that it was mere moments away from finalization, talks mysteriously ceased, the Radio Equalizer can report exclusively today.

In a letter from attorney Robert Wollin, on behalf of Kramer Levin Naftalls & Frankel LLP, a New York City bankruptcy firm now handling Air America's disposition, the liberal talk radio network's backers were notified of this unexpected development. Investors seemed to be counting on the deal as a way to escape with a few bucks and finally put this loser behind them for good.

Assuming this was a mere temporary negotiating ploy by Drobny, who has privately funded the purchase of Air America affiliate stations through Nova M LLC, your Radio Equalizer waited to report on this sudden turn of events. Now, barring another unexpected development, it seems unlikely that Air America co- founders Sheldon and wife Anita will retake ownership of the firm.

A "binding letter of intent" with the Drobny Acquisition Group LLC has expired, leaving Air America with few options, other than to find another buyer, file for bankruptcy protection or to simply shut down.

And in recent days, Sheldon has been unusually quiet. In fact, he hasn't updated his Huffington Post blog for almost a month.

Even if such a filing is sought, it's hard to understand how the company will continue to operate, because there simply isn't enough cash coming in to cover basic expenses, beyond payroll and perhaps a few utility bills. Taking cover from the network's substantial debt won't be nearly enough.

Meanwhile, staffers are said to be updating resumes and hoping for the best. In the meantime, though, who's in charge?

Oddly, former managerial players seem to come and go, reappearing mysteriously in the hallways just when they are least expected.

But why is that a surprise? There's been something downright shadowy about Air America's ownership and management structure from the day it was created.

With that, as this company is either bought out or shut down in the next week or two, watch for more eleventh- hour intrigue.

UPDATE: Chapter 11 bankruptcy is the choice, media outlets reported earlier today. We'll have more details coming shortly. Somehow the company will try to remain on the air, but we don't understand where cash will come from to meet basic needs. The Smoking Gun has the filing details.

More from CBS News, which notes a number of executive departures that we first reported here weeks and even months ago:

The filing and executive shuffle marked the latest turbulence at the liberal talk radio network, which went on the air two years ago. This April, Danny Goldberg stepped down as CEO and was replaced by an interim chief executive from a management consulting firm.

"Nobody likes filing for bankruptcy," Elberg said in a statement. "However, this move will enable us to concentrate on informing and entertaining our audience during the coming months."

Air America has struggled financially since its inception. According to documents filed with the U.S. Bankruptcy Court for the Southern District of New York, the company lost $9.1 million in 2004, $19.6 million in 2005 and $13.1 million so far in 2006.

Air America also disclosed in the court documents that two directors departed in the last two months, Douglas Kreeger and Tom Embrescia. Gary Krantz also departed as president in June, and executive vice president Tom Athans and chief operating officer Carl Ginsburg both left in July.

In this press release, Air America notes that it will remain on the air through a credit facility provided by Democracy Allies LLC. Who are they? That's the million- dollar question today.

Another point (which several lawyers had noted in emails to us a month ago) is that this filing opens up the books on all of the company's questionable moves, including long- sought details on the Gloria Wise scandal. It's only going to get more interesting from here.

While Matt Drudge continues his weird animosity toward conservative blogs (despite being duped by the liberal Think Progress site last month) USA Todaylinks to this site.

As for Al Franken, he is suddenly unavailable for comment today. Since when does Stuart skip an interview opportunity?

A reader found Democracy Allies LLC listed as a Delaware corporation, isn't it interesting how similar the name is to Democracy Alliance, the George Soros- backed political investment fund?

Obviously, bankruptcy filings provide Air America protection from its creditors while it restructures the business in an attempt to find some traction in its listenership and funding that is sustainable and sufficient. Trying to spin a Chapter 11 filing as a positive development, however, is wierd. If your point, Minister, is that this isn't the end of Air America, you're right. But bankruptcy is one of the steps that a failing company takes before its final demise.

elmonica... this is a blog about radio with a conservative slant. Like most bloggers, Brian occasionally diverts from his theme, but this isn't one of them. Your attempt to drag this discussion off-topic is transparent and weak. One would have to subscribe to the principle that no subject may be discussed if there is another subject of greater importance available in order to accept your premise.

I think that successful liberal talk radio is possible, but not from an "If you build it, they will come" approach like AA attempted. You find something that works in one market, then try to grow it.

Seriously, Minister, in person you'd be calling me sir, so spare me the all-caps internet machismo. You make a nice blog into a chore with your childish hate.

I read Brian's blog along with maybe 20 others during the day to fill the gaps at work. It's for entertainment purposes only. I myself voted democratic all my adult life until 9-11. I was a registered Independent then and I still am. I'll vote for whoever is the most anti-nazi, anti-communist and anti-religious fascist. Right now that's the Republicans. It's not about who I hate down south or how superior I feel because I understand performance art.

I'm not an angry partisan like you who takes a pro/con stance only after learning the political affiliationn of the parties involved. Guys like you readliy march under banners of Stalinist front groups. Read The Black Book Of Communism and then think about that. The right hasn't come close to that since David Duke ran in 1991.

As a Jew I'm also against the genocide of my people in the middle east. Duh. For yuks I do call myself a neo-con because we're former liberals who think liberalism is failing liberal democracy, and I think that pisses off certain people I don't want to know anyway.

Trolls like you might be fascinating if you weren't so creepy and two-bit pathological. You come to this smallish blog every day just to get angry and leave bitter, screaming rants. You go where you're not wanted and throw poop against the wall. Amazing. You must be under 25. If not then it's five times as sad.

Maybe at one point you were someone who simply meant well, but look at you now. You're a hateful little man who surrounds himself with equally hateful people. Maybe the ego component of paranoia makes you feel better. Who knows.

I imagine you're over-educated, come from money, and have had few adult life experiences. I love this line from (I think) Rich Lowry: "Intellectuals look at the world through literary prisms of theory. They come up with a vision of the world - one that usually magnifies their importance - and then select facts accordingly."

I bet that's you to a T, Minister Of Propaganda, an internet coward and bully if there ever was one.

Please make sure to get the public filings for AA. They have to schedule out debts and assets and certain priority debts such as compensation are the first to be paid from the estate. You will be able to tell if they stiffed the little guys who draw a weekly check from Airhead America.

Now if its not the end, how in the world do you convince advertisers to keep writing checks when they don't know if their ads will even run?

Glaser apparently has all the AA Paper IOUs that he cares to hold. And Drobny aint writing a check but is willing to act like he will on occasion if it gets him a chance to smooze with the big boys.

All in all, pretty damn funny. And I still can not hear the broadcast in Dallas. Soon no one will even try.

Air America was a projectile-vomit spew of Randy Rhoads/Al Franken's undigested stomach-pump junk food for the left-wing mind [pardon the oxymoron]. It paid stations to run its drivel, since the audience ranged from slim to none and advertisers wouldn't run ads on such an idiotic set of programs.

I listened only a few times, and between the vulgarities, the obscenities, and the inanities, there was nothing but idle chatter about the weather. Otherwise just chewing gum for the left-wing mind [again, pardon the oxymoron].

But I watched an ultra-left professor at the U. of Minnesota-Duluth last night on The Factor and this obese idiot claimed Bush was behind the 9/11 disaster and had it staged with thousands of accomplices. UWis-Madison has an adjunct prof making his students buy a book touting the same insane lunacy.

Franken just moved to Minnesota, to be closer to his mental colleagues who elected the brain-challenged buffoon-wrestler Jesse Ventura. The dumb Swedes and Norwegians there eat lutefisk and adore Garrison Keillor. Something in the water, I guess. By the way, Minnesota and Wisconsin lakes are where the loon is found more than anywhere else. Coincidence?

OK, let's summarize the pathetic excuses given by liberals for Air America's failure:

1. Denial - Air America hasn't failed. This Chapter 11 filing is really a good thing, as it gets rid of all those pesky bills that have been piling up. It sure beats producing actual revenue to pay them.

2. Karl Rove - He's behind everything else. Why not this?

3. Liberals are too smart to listen to the radio - In fact, there hasn't been a task created by man that can adequately employ the massive intellects possessed by liberals.

Trying to create a sustainable national radio network out of thin air was obviously a crappy business model. They should have started out small, like a few local markets, and then worked their way big, if they could.

Probably what will happen now is just that -- when AA folds up for good, their on-air talent will find local niche markets, and also XM or Sirius.

No, Butch, it does appears they have filed (after a deal "fell through" at the "last minute"...)

As I said weeks ago when unfounded rumors started flying--who cares?

Companies do this as a matter of course, first five years after startup. They do it to get their acts together (which will never happen, as long as right-wing moneychangers are on the board, but that's another story)...

I shopped at KMart the other day. They filed for bankruptcy, not too long ago.

I saw Donald Trump on TV the other night, and he's filed for bankruptcy. He certainly didn't sound as though he was washed up.

As a business, AAR has made horrible programming and business choices...but none of those choices can be traced back to the actual liberal voices of the network...only the moneychangers who infiltrated it, and used it to launder their ill-gotten gains through. Normal, everyday people see that. They realize who's really behind all this.

It did indeed shift focus, however momentarily, from over six hundred forty-four thousand dead Iraqis and the Republican statutory child-rape scandal.

Whatever. I just want to see the Rethugs go down for the count (as G-d has demanded....)

Have you thought of the numbers required to reach the Lancet 644,000 fatality rate in 42 months. That is, about 1,260 days.

Do the math...

About 512 fatalities / day...

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I am certain Air America is out there pounding the pavement to get truth to power. Maybe interviewing Jason Leopold at Truth Out or something. It might be difficult for an Air America host to get access to Air America corporate leadership... They can neither confirm nor deny...

It is a great thing to go bankrupt. It sure helps out when seeking credit for business growth. Then again, we might just get another name change after they stiff the children...

"In fact, Kelly, who ended his on-air weather career in 1985 at WKOW-TV (Channel 27) in Madison, still works in the weather business as owner and president of Weather Central Inc. His firm is housed in the same building as WKOW, which he later managed and co-owned. Weather Central provides weather forecasts and computer graphics to TV stations and newspapers nationwide."

"But Kelly has devoted much of the past year to wrangling a financial storm that nearly submerged Air America. He and his wife, Mary, were among a half-dozen investors in the startup network who lost their initial $7 million outlay to the mismanagement, if not outright fraud, of the original management team."

I'll say it again: One of Air America's biggest misfires (and one that anybody who understands radio should have seen through from the beginning) was making a big deal out of how many stations carried its programming. The AAR Web site would carry a banner crowing about "Now on 64 stations," etc., and list the newest members of the network.

But the number of stations in any radio network is virtually irrelevant -- because all stations are not created equal. When Rush Limbaugh is on a 50,000-watt powerhouse, yet Randi Rhodes & Friends are on some puny 500-watt, daytime-only station powered by D cells, it doesn't take an electronics engineer to figure out who's going to win that little duke-out. Sheesh, one California station was so weak that its Web site actually directed listeners to use the Internet to pick up the station if they couldn't hear it otherwise. Now how pathetic is that?

Really, when it comes to coverage, one 50,000-watt transmitter is worth a trunkload of 500- and 1,000-watt stations.

And the fact that AAR continually tried to gloss over this point -- with a straight face, no less -- says everything about the way that network did business.

A company in bankruptcy can cancel their existing employee contracts! That means that Franken can kiss his extravagant salary (a.k.a. illegal campaign contribution) goodbye. Now he will have to work for a living!

And this will put a big dent into his campaign plans to be the Senator from Minnesota.

Another "biggie" - the citizens of Minnesota won't be showered with a big budget Franken Lie Advertising campaign.

Before anybody picks a bone with my last post, let me clarify something:

The number of stations in a rado network isn't "virtually irrelevant" in and of itself. (Obviously, a 600-station network is nothing to sneeze at, no matter how you stack it.)

My point was that a statistic like "now on 64 stations" is virtually meaningless without any further information. A network of 15 50,000-watt stations can cover more territory than a network of 100 500-watt stations, and that's what I was driving at.

Being on 64 puny stations is even less exciting when you were on 70 last month, eh...

Regardless, hasn't Error America already gone through a few quasi bankruptcies and reorganizations? They should be quite good at it. I guess they are the eggs in Stalin's omelet comment. I really feel sorry for that egg who has already been cracked twice. I wonder if he has anything left in his retirement account.

Are there any websites I can donate advice to? I am all tapped out after donating a nickel to the Phoenix effort.

Obviously, you were ahead of the news cycle in reporting that Air America would file for bankruptcy. Thus, you were wrong, and Air America was not in as bad of shape as you reported weeks ago. Just admit it.

er..sorry Brian, my mind was overtaken by "liberal logic." Good work as usual.

No, JD, you "detect" a direct hit on what (and who) is truly behind many neocon-inspired business maneuvers and trickery, what was the true motivation behind the Malloy firing and other strategic right-wing initiatives designed to drive away leftist listeners from what was, essentially, their only commercial talk-radio outlet, and the only real counterpoint to the rapture drone...and you're getting it from someone whose insight actually MATTERS on the subject.

If Jewish radio staffers on both the right and left openly acknowledge and even debate the pro-Zionist factor, and motivation behind these takedown schemes, even to the point of debating the issue to death, how can that be anti-Semitic? Has not criticism of Repug neocon whore Armstrong Williams' destructive presence on the WLIB morning show, for instance, not been "racialized" by the hyprocritical racist authoritarians on the right, to deflect and stifle any criticism of his influence on THAT program?

No Foley-like vacillating here.

Incidentally, 4th Estate is absolutely right on when he discusses a key issue that hurt AAR's business model (or, rather, lack of one) when self-promoting.

But, in the end, these financial weaknesses (Soros, my ass) plagued the network from the start, and doomed it to infiltration of the moneychangers who, with characteristic evil, undermined the network's mission from the start. Ultimately, many of the original founders were hoisted by their own petard...their very willingness to constantly prove their openmindedness and fairness left the door open for malfeasance and evildoers to take root.

Look at conservative business "ethics", deviant sexual practices born out of repression, ambivalence toward human life (our soldiers and foreign nationals, particularly), and contempt for financial accountability and environmental responsibility.

Why would anyone be surprised that dark forces would NEED to take down Air America from the inside, given the threat it represented?

Elmonica and Hashfanatic,How about you round up some of your liberal buddies and do what the writer of this letter requests. It's a small town that you can just build and make new really quick. Is that so hard? Surely you wouldn't turn your backs on Native Americans, would you? You could use the AAR business model and simply throw a lot of money at it.

No J.DI actually do have a life beyond blogs. I have been busy, I'm engaged, spent the weekend planning for my future, yes contrary to what Limbaugh told you about "liberals hating families", I'm plannig for my future, which includes a family (with children and my wife) too busy to waste my energy arguing with Sycophants, who take party over country, and think being a conservative is the same as being a "Jet fan". I don't think Emerson did anything other than make me giggle with laughter "as a Jew I'm also against genocide"???? Rolling on the floor, you have been used!! If you think the GOP supports Jews, you might be a drug addict!!! This fool thinks somehow because I despise the corrupt GOP, that I'm now a Stalinist!!! This ignorant fool, did not shoot me down!! I have not been online in 3 days. Simple as that, I have a LIFE. I go away for 2 days, Rich in Mt. says I have a "life partner", I do, who happens to be a FEMALE. The only weapons the radical right has is gay baiting. Pathetic. Anyway, back to Emerson, being Jewish is a lot more than being a "neo-con", and supporting Isreal. "neo-conservatism" is a doctrine based on pre-emption, global domination and is bad for the world. You desire Isreal to be destroyed if you support "neo-conservstism", you mock Judiasm, by supporting the war mongers over peace. Me from a background of money!!!! Hysterical!!! funniest one yet, I'm the son of a transit worker, as middle class as you can possibly get. I'm 33, have been on my own since 18, lots of real world experience, hence I'm a liberal, I gravitate to the ideology that is in my BEST interest, not global corperations. Emerson, your as pathetic as they come. Wave that Isreali flag, if does not make you Jewish. I'm more in tune with spirituality than you will ever be, and I do not wave any flag. I'm bored with this blog and bored with fake-Jews, fake-conservatives and hacks. Maybe my first post in this thread was rash, but it makes me sick to see, know nothing's gloat over a company that has a $23 million debt, as if this is the greatest thing in the world. I work for a company with a huge debt, I fax the stuff to the accountants, it's not the end of the world over here, it's not the end of A.A either. $23 million is a small debt in the business world, and Im far from a CEO, this is logic folks. Gloat away, AA stays, and with good management, the debt could be taken of. Either way, the GOP is toast in November, America rejects the Iraqi war.